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It has long been argued that the strength or weakness of the U.S Dollar depends largely on the Interest rate cycle that the FED is operating on.
The theory being:
• A rate lowering cycle drives down interest cost to borrow the Dollar.
• The amount of Dollars in Circulation increases, Meaning a Weaker Currency value. On the flip side,
• A rate raising cycle drives up the interest cost to borrow the Dollar.
• The amount of Dollars in Circulation decreases, Meaning a stronger Currency value. This is the Basis of the Quantity theory of ... READ MORE